Money & Markets: Stocks up as Cyprus banks open

Today’s Money & Markets Brief is sponsored by CanadiansDeserveMore.ca. Get answers to your questions about Astral and Bell Media’s plans to join together as a truly national, private, bilingual media group. We’ve got MORE for Canadians.

It’s looking like an up day for investors in Europe and North America, the final trading day of the first quarter of 2013 for most markets which will be closed Friday for the holiday weekend, and the first day of banking in Cyprus since the crisis erupted last week.

Banks in Cyprus reopened for business but with strict controls on transactions to avoid a run on the financial institutions whose large depositors face a hefty levy to help cover some of the cost of the bailout.

Markets closed sharply lower in Asia, but were rising up in Europe after a weak start, and poised for a higher opening in North America in advance of economic reports expected to show a second upward revision to fourth quarter growth in the U.S. and a marginal rebound in growth in Canada in January from a slump December.

Markets here might also get a lift from news this morning of “better than expected” earnings from BlackBerry, which Reuters reports were “driven by demand for its new touch-screen device which holds the key to a successful turnaround for the smartphone maker.”

“The Bank of Canada will have a close eye on today’s January GDP report, hoping the economy at least emerged from the penalty box,” says Sal Guatieri, economist at BMO which projects 0.1 per cent growth for the month.

“If not for the return of play of our national sport, the economy likely would have remained flat after contracting 0.2 per cent in December, as manufacturers’ shipments fell and retail volumes stalled,” he says, noting that the end of the NHL lockout, with an assist from stronger wholesale trade, should lift GDP 0.1 per cent. “Still, the economy will need to mount a serious third period comeback for even our lowly 1.5 per cent growth estimate to remain on-side in the quarter.”

The OECD in its Interim Economic Assessment of the global economy today projects growth in Canada of just “1.1 per cent during the first quarter and 1.9 per cent during the second” noting that “global economic activity is picking up, but the continuing crisis in the euro area is delaying a meaningful recovery.”

On Wednesday, Canada’s benchmark S&P/TSX slipped 6.73 points or 0.05 per cent to 12,699.65 while in the U.S. the blue-chip Dow, which at one point was down a hefty 120 points, recovered somewhat to close off just 33.49 points or 0.23 per cent at 14,526.16.

The Canadian dollar, which slipped a notch to 98.38 cents US yesterday in the wake of news of a greater than expected rise in inflation to 1.2 per cent, was edging back up this morning while commodity prices were mixed.

Scotiabank, meanwhile, says that its commodity price index, after strengthening in early 2013, “inched down” 0.9 per cent in February. “Commodity prices eased back after China’s Lunar New Year holiday, alongside mixed economic indicators from China and another bout of risk aversion related to financial developments in Cyprus,” says Scotia bank commodity market specialist Patricia Mohr.

In other economic and finance-related news:

Canadian consumer confidence has been “remarkably stable” over the past year, according to the Investors Group – Harris Decima consumer confidence index which this month stands at 77.6. That’s a “slight increase” from 75.3 in March of 2012 but a “small dip” from 79.0 in November of 2012.

Confidence among smaller business owners, however, “took a hit in March after two months of encouraging growth,” the Canadian Federation of Independent Business reports, noting that its Business Barometer index dropped three and a half points from February to 62.9.

Nearly four in 10 employers are now hiring college grads for jobs that were primarily held by high school graduates, according to results of a survey released today which found that employers are not only looking for educated labor to fill high skill positions, but to fill traditionally lower skill jobs as well.